World Economic Forum Meet, Davos: Nirmala Sitharaman recently spoke at a panel decision on ‘India’s Time to Transform’ at the World Economic Forum meeting in Davos. She said that one needs great courage and leadership to take a bold step such as demonetisation.
She said in the meeting that the Narendra Modi-led government owed demonetisation to the country. This step she was was essential to eradicate the menace of black money in the country. She said that it was a part of the “electoral promise we made to check the black money menace”.
Nirmala Sitharaman calls demonetisation an absolutely necessary move at the World Economic Forum Meet
“Right after coming to power we started with setting up the special investigation team, came out with the scheme for the declaration of the undisclosed money, tightened tax treaties with different countries to check round-tripping of money. We took all these steps”, she said in the meeting commenting on the demonetisation policy.
“This step of demonetisation was absolutely necessary…87 percent of our economy was informal and only in the cash-driven segments where the money would not go to banks…only about 50 lakh people pay tax and all others who file the returns do not file any tax”, she added.
“Can we survive if this kind of tax to GDP ratio continues…we had to do it, we owed it to the country and we do not regret it…even if it sounds propagandist…you need a strong and courageous leadership to take such a bold step.”
The panel also discussed the recent demonetisation move introduced by the government. Kenneth Rogoff, professor of Economics and public policy at the Harvard university said that the same decision could have been implemented with much more diligence and prudence.
To this, Ms Sitharaman said that if the decision was taken with introduction o a prior notice, the “smart” Indians would have sensed the upcoming policy change and they could have found out some convenient way out and it could have led to the failure pf the policy. She also added that she felt for her fellow Indians who were going through numerous hardships after the demonetisation policy and pays respect to them.